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George  Davidson 


Professor  of  Geography 
University  of  California 


||mon  of  the  iost-flflup  and 

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LETTER  TO  THE  POSTMASTER  GENERAL 


ON  THE 


EUROPEAN    AND    AMERICAN    SYSTEMS     OF     TELEGRAPH, 
WITH  REMEDY  FOR  THE  PRESENT  HIGH  RATES. 


GARDINER   G.   HUBBARD. 


This   Edition   is  printed   only  for   Private    Circulation. 


BOSTON: 

WRIGHT  &  POTTER,  PRINTERS,  79  MILK  STREET,  (COR.  OF  FEDERAL.) 

1868. 


BOSTON,  Oct.  19th,  1868. 
Hon.  A.  W.  RANDALL,  Postmaster-  General  : 

Dear  Sir, — I  beg  leave  to  submit  herewith,  for  your  consider- 
ation, certain  facts  and  statements  in  regard  to  the  operation  of 
the  electric  telegraph  in  Europe  and  in  this  country,  which  I 
have  prepared  at  your  request. 

The  transmission  of  correspondence  by  post  forms  one  of  the 
most  important  functions  of  the  governments  of  all  modern 
civilized  nations.  This  duty  has  been  committed  to  the  gov- 
ernment exclusively,  because  the  interests  of  the  whole  people 
are  thereby  more  effectually  subserved  than  when  it  is  performed 
by  private  enterprise. 

The  conditions  essential  to  the  success  of  the  post  are  celerity, 
certainty  and  secrecy  in  transmission,  low  and  uniform  rates, 
and  ample  facilities  for  the  reception  and  speedy  delivery  of 
the  mail. 

Private  enterprise  might  transmit  and  deliver  the  mail 
between  large  cities  at  rates  lower  than  those  charged  by  gov- 
ernment ;  but  the  reverse  would  be  the  case  between  smaller 
places,  and  as  the  majority  live  in  the  country,  the  few  would 
be  benefited  at  the  expense  of  the  many. 

Greater  changes  have  taken  place  during  the  past  forty  years 
in  the  method  of  transmitting  correspondence  than  in  all  pre- 
ceding ages,  and  greater  than  will  probably  be  made  in  the  ages 
to  come.  The  first  important  change  was  induced  by  the  intro- 
duction of  steam  as  a  motive  power.  This  was  followed  by  the 
substitution  of  low  and  uniform  rates  for  high  and  irregular 
charges ;  then  by  a  great  increase  in  the  facilities  for  receiving, 
transmitting  and  delivering  the  mails. 

The  number  of  letters  passing  through  the  British  post-office 
since  the  transmission  by  rail  commenced,  has  increased  from 
75,000,000  to  705,000,000  ;  and  in  this  country  from  40,000,- 
000  to  40Q,000,000. 


The  introduction  of  the  electric  telegraph  has  worked  a  still 
more  wonderful  change.  It  is  for  the  future  to  develop  and 
perfect  this  method. 

The  reasons  that  have  induced  the  public  to  commit  to  the 
government  the  transmission  of  the  mails  by  rail,  have  induced 
most  civilized  nations  to  intrust  it  with  the  duty  of  transmitting 
correspondence  by  telegraph.  England  and  America  are  the 
only  important  exceptions. 

The  expediency  of  uniting  the  telegraph  and  the  post  has 
been  fully  discussed  in  England  during  the  last  two  years,  and 
the  result  is  the  passage  of  the  electric  telegraph  bill  by  Par- 
liament in  July,  1868,  ratifying  certain  provisional  agreements 
made  between  the  post-office  department  and  the  several  tele- 
graph companies  for  the  purchase  and  sale  of  all  the  lines  of 
telegraph  in  the  United  Kingdom.* 

The  desirability  of  a  postal  telegraph  has  been  brought 
before  congress  at  different  times.  A  report  upon  the  subject 
was  made  by  the  committee  of  Ways  and  Means  in  1845, 
when  Prof.  Morse  obtained  an  appropriation  to  aid  in  the 
construction  of  a  line  of  telegraph  from  Washington  to  Balti- 
more. It  was  again  considered  in  the  first  session  of  the  thirty- 
ninth  congress,  1866.  Executive  Document  No.  49  of  the 
Senate  contains  questions  from  the  postmaster-general  to  gen- 
tlemen interested  in  the  largest  companies  for  information 
upon  this  subject,  with  their  answers. 

In  the  second  session  of  the  fortieth  congress,  1868,  a  bill 
was  introduced,  and  a  valuable  paper  submitted  by  the  Hon.  E. 
B.  Washburne,  relating  "  to  the  union  of  the  telegraph  and 
postal  systems."  Another  bill  was  also  introduced  and  referred 
to  the  committee  on  Post  Koads  and  Routes,  "  to  incorporate 
the  United  States  Postal  Telegraph  Company  and  to  establish  a 
postal  telegraph  system." 

This  country  is  unsurpassed  in  the  advantages  it  possesses  for 
the  successful  development  of  the  telegraph.  The  climate, 
character  and  habits  of  the  people,  the  various  centres  of  busi- 
ness and  the  vast  extent  of  territory,  combine  to  give  it  this 
superiority.  The  climate  is  generally  dry,  and  the  telegraph  is 

*  Two  valuable  and  exhaustive  reports  upon  this  subject,  prepared  by  Frank  Ives 
Scudamore,  with  maps  and  other  documents,  have  been  sent  by  him  to  the  subscriber,  and 
have  proved  of  the  greatest  service  in  the  preparation  of  this  Report. 


operated  with  greater  facility  than  in  most  countries  in  Europe. 
The  character  and  habits  of  the  people  demand  dispatch,  while 
economy,  both  in  business  and  domestic  life,  is  less  practised 
here  than  abroad.  It  possesses  one  great  monetary  capital, 
—New  York — and  one  civil  capital — Washington — with  smaller 
State  capitals.  There  are  great  centres  for  different  kinds  of 
business.  New  York  for  foreign  commerce  and  money ;  Bos- 
ton for  New  England  manufactures ;  Chicago,  St.  Louis  and 
Toledo  for  grain  ;  Cincinnati  and  Chicago  for  pork  and  beef ; 
New  Orleans  and  other  Southern  cities  for  cotton.  Each  of 
these  centres  regulates  the  price  of  its  own  staple ;  each  is  a 
commercial  monetary  centre  for  its  own  section  ;  and  each  has 
communication  with  the  other  centres  relating  to  its  staple  prod- 
uct. In  addition,  the  great  distances  which  separate  the  vari- 
ous sections  of  the  country  afford  facilities  for  sending  messages 
by  night  as  well  as  by  day,  and  yet  anticipate  the  mail  by 
many  hours. 

The  magnitude  of  this  interest  is  shown  by  the  large  sum 
annually  expended  for  correspondence  by  telegraph.  For  the 
year  ending  June  30, 1867,  the  whole  sum  expended  for  inland 
letters  and  papers  by  the  public,  was,—  .  *  $17,470,000  00 
For  messages  by  telegraph,  ....  7,896,000  00 

This  last  sum  is  larger  than  the  entire  expenditure  of  the 
post-office  department  in  1850,  and  equals  the  amount  annu- 
ally expended  by  all  the  nations  of  Europe  for  correspondence 
by  telegraph,  though  the  number  of  messages  transmitted 
in  Europe  is  much  greater. f  A  comparison  of  our  system 
with  that  of  other  countries  will  show  whether  we  have 
availed  ourselves  of  these  advantages.  For  this  comparison, 
three  nations  have  been  selected  that  possess  no  peculiar 
advantages  for  the  development  of  the  telegraph — Belgium  and 
Switzerland,  where  the  post  and  telegraph  are  united  and 
operated  by  the  State,  and  Great  Britain,  where  messages  are 
transmitted  by  private  companies  as  in  this  country. 

*  Page  145  of  the  report  of  the  postmaster-general  for  1867,  gives  the  aggregate 
amount  expended  for  the  year  ending  June  30,  1867,  at  .  .  .  .  $19,235,483  00 
Less  sums  expended  for  foreign  mails  and  congressional  matter,  .  .  1,765,129  00 

$17,470,354  00 
f  Table  A  gives  the  number  of  messages  and  amounts  paid  by  different  nations. 


BELGIUM. 

The  area  of  Belgium  is  about  one-fourth  that  of  the  State  of 
New  York,  with  nearly  the  same  population.  Its  greatest 
length  is  175  miles,  its  width  105  miles.  Three-quarters  of 
the  population  live  within  fifty  miles  of  Brussels,  the  capital. 
Of  four  of  the  largest  cities,  Antwerp,  the  farthest  from  the 
capital,  is  reached  by  rail  in  fifty  minutes ;  while  thirty  min- 
utes, on  an  average,  elapse  between  the  reception  of  messages 
at  the  telegraph  office  and  their  delivery.  The  great  advantage 
of  the  telegraph  over  the  post  is  in  its  continual  departure  and 
arrival,  the  transmission  of  letters  depending  upon  the  trains 
and  the  distribution  and  delivery  of  the  mail. 

In  1850  the  private  lines  then  in  operation  were  purchased 
by  the  government,  and  have  since  been  under  its  management. 
The  rates  were  originally  one  franc  and  a-half  for  a  message 
of  twenty  words.*  At  these  rates,  the  telegraph  was  little  used 
for  inland  messages,  and  its  development  was  very  slow.  In 
January,  1863,  they  were  reduced  to  one  franc,  and  December, 
1865,  to  half  a  franc. 


In  1862,  the  inland  messages,  at  1J  francs,  numbered  105,274 
1865,         "  "         at  1     franc,         "  332,718 

1867,         "  "        at  i  a  franc,         "  819,668 


Total  receipts  in  1866, 
"     expenses  in    " 


961,112  francs; 
839,000     " 


Besides  the  inland  messages,  there  are  transit  and  inter- 
national messages,  the  rates  for  which  are  fixed  by  agreement 
between  the  several  nations  of  Europe.  The  rates  for  these 
classes  of  messages  have  been  reduced  at  different  times,  but  are 
still  considerably  higher  than  for  inland  messages.  The  effect 
of  each  reduction  has  been  to  reduce  the  cost  of  each  class  of 
messages  and  increase  the  number  of  the  class  the  rates  of 
which  were  reduced  ;  and  though  the  reduction  of  the  tariff 
for  inland  messages  by  one-half  in  December,  1865,  did  not 
cause  an  equal  reduction  in  the  average  cost  of  each  inland 

*  The  message  in  every  State  on  the  Continent  is  twenty  words,  including  date,  address 
and  signature.    Gold  is  reckoned  at  a  premium  of  40  per  cent. 


message,  yet  but  for  the  extraordinary  increase  in  the  number 
of  inland  messages,  caused  by  the  reduction  of  rates,  the 
cost  of  international  and  transit  messages  would  have  remained 
the  same,  instead  of  being  largely  reduced. 

Estimated  profits  for  1866  on  the  entire  business  if  no  reduc- 
tion had  been  made,         ....       198,499  francs. 

Actual  profits  for  1866,  under  the  reduced 

rates, 122,112      « 

Actual  loss  by  reducing  the  rates  on  inland 
messages  one-half,* 76,387  francs. 


Total  receipts  from  messages  from  1850-1868,    8,777,544  francs. 
"     expenses   for    construction,   operation 
and  maintenance  of  lines,        .         .         .    7,784,634     " 


Balance  of  net  profit,         .        .       992,910  francs. 

A  system  of  railroads  is  also  owned  and  operated  by  the 
government,  and  the  telegraph  is  connected  with  both  the  rail- 
road and  the  post.  A  large  proportion  of  the  offices  are  at  the 
railway  stations,  but  every  post-office  is  an  office  of  deposit, 
from  which  messages  are  dispatched  at  once,  free  of  charge,  to 
the  nearest  telegraph  office,  when  in  the  same  district ;  other- 
wise by  the  first  messenger  or  by  special  carrier,  on  payment  of 
an  extra  rate  for  delivery.  This  union  of  the  telegraph  with 
the  post  and  railroad  reduces  the  expenses  for  operators, 
clerks,  general  management,  rent  and  office  expenses,  and 
brings  the  system  into  close  connection  with  every  citizen. 

The  rates  are  prepaid  by  stamps,  and  are  uniform  and  low. 
The  rate  for  all  inland  messages  by  telegraph,  or  by  telegraph 
and  post  where  the  place  of  deposit  or  delivery  is  not  on  the 
line  of  the  telegraph,  is  one-half  franc,  [or  thirteen  and  a  half 
cents  currency.] 

The  telegraph  is  used  extensively  for  all  kinds  of  business, 
social  equally  with  commercial,  and  by  all  classes  of  people. 
A  larger  proportion  of  correspondence  is  carried  on  by  tele- 

*  From  report  of  the  Belgian  Telegraphic  Administration  for  the  year  1866. 


graph  than  in  any  other  country.  This  proportion,  and  the 
great  increase  of  business  consequent  upon  a  reduction  of 
rates,  is  shown  in  the  following  table,  where  1  represents  the 
number  of  messages  before  the  reduction  was  made,  and  also 
the  number  of  messages  per  mile  of  wire : — 


1803. 

1864. 

1866. 

Messages,      .        .        .        .         . 

1 

2.5 

6.9 

Messages  per  mile  of  wire,    . 

1 

1.5 

2 

Messages  to  letters,       .... 

1  to  187 

Ito    88 

Ito    37 

Messages  to  letters  in  Great  Britain, 

1  to  221 

1  to  169 

1  to  121 

Messages  to  letters  in  Switzerland, 

Ito    80 

Ito    70 

Ito    69 

Messages  in  proportion  to  population  in 

1  to      6 

Messages  in  proportion  to  population  in 
Great  Britain,   

- 

- 

Ito      5 

SWITZERLAND. 

The  area  of  Switzerland  exceeds  that  of  Belgium,  but  its 
population  is  one-half  less.  It  is  about  200  miles  long  by  138 
wide.  The  Swiss  are  as  different  from  the  Belgians  in  charac- 
ter and  habits  as  ,the  two  countries  are  in  physical  aspect. 
The  general  arrangements  of  the  telegraph  system  are  similar 
to  those  of  Belgium.  In  Switzerland,  money  orders  may  be 
sent  by  telegraph  or  post ;  this  feature  is  of  quite  recent  intro- 
duction, and  is  coming  into  frequent  use.  The  railroads  in 
Switzerland  are  not  owned  or  operated  by  the  state  ;  the  tele- 
graph is,  therefore,  connected  solely  with  the  post,  and  about 
two-thirds  of  the  line  are  on  ordinary  roads,  one-third  only  on 
railroads. 

The  rates  for  messages  were  fixed  at  the  opening  of  the 
lines  in  1852,  at  one  franc,  [twenty-seven  cents  currency.] 
The  development  of  the  system  was  much  more  rapid  than  in 
Belgium,  as  the  advantages  afforded  by  the  telegraph  were  rela- 
tively greater,  the  rates  being  less  and  transmission  by  post 
slower.  The  proportion  of  telegrams  to  letters  was  therefore 


Table  B  gives  further  statistics  relating  to  the  Telegraph  in  Belgium. 


greater  in  Switzerland  until  the  last  reduction  in  rates  in 
Belgium.  Since  that  time  the  relative  proportions  have  been 
reversed. 

On  the  first  of  January,  1868,  the  rates  were  reduced  to  one- 
half  a  franc,  and  the  correspondence,  which  had  been  increas- 
ing at  the  rate  of  ten  per  cent,  a  year,  nearly  doubled  at  once^ 

The  number  of  inland  messages  transmitted 

in  the  first  quarter  of  1867  was,       .        .  76,746 

The  number  of  inland  messages  transmitted 

in  the  first  quarter  of  1868  was,       .         .  145,207 

— an  increase  of  90  per  cent. 

Total  receipts  from  messages  from  1852  to 

1868, 7,719,709  francs. 

Total  expenses  for   construction,  operation 

and  maintenance, 7,563,268     " 

Balance  of  net  profits,        .        .     *156,441  francs. 

In  Belgium  and  Switzerland  the  telegraph  is  used  more 
freely  than  in  other  countries.  Table  A  gives  such  limited 
statistics  as  were  available,  of  the  operations  of  the  telegraph 
in  other  continental  nations. 

The  results  deduced  from  an  examination  of  the  continental 
system  are  as  follows,  viz. : 

1.  That  the  telegraph  is   generally   employed    in    certain 
countries  poorly  adapted  to  its  development,  and  where  there 
is  comparatively  little  necessity  for  its  use. 

2.  That  in  those  countries  the  rates  are  low  and  uniform, 
and  the  business  most  profitable. 

3.  That  the  increase  of  messages  is  small  but  regular,  except- 
ing after  a  reduction  of  rates,  when  it  is  immediate  and  great. 

4.  That  in  those  countries  the  telegraph  is  united  with  the 
post,  easy  of  access,  and  brought  into  close  connection  with 
the  people. 

5.  That  the  telegraph  is  used  for  all  kinds  of  business,  social 
as  well  as  commercial,  and  by  all  classes  of  people. 

*  Table  C  gives  further  statistics  relating  to  the  Telegraph  in  Switzerland. 
2 


10 

6.  That  with  the  increase  of  the  business  the  rates  have 
been  reduced,  and  the  cost  of  each  message  diminished. 

7.  That  messages    are    of  twenty  words    including  date, 
address  and  signature,  and  the  rates  prepaid  by  stamps.     The 
lowest  rate  is  one-half  a  franc,  [13T5^  cents  currency.] 

8.  That  the  rate  for  added  words  is  less  per  word  than  for 
each  of  the  first  twenty  words. 

9.  That  the  delivery  is  by  special  carrier,  immediate  and  free 
of  expense  to  all  places  within  one  or  two  miles  of  the  tele- 
graph office,  and  there  is  no  extra  charge  for  transmission  by 
mail  where  either  sender  or  receiver,  or  both,  live  at  a  distance 
from  the  lines. 

10.  That  the  press  messages  are  few  and  short. 

GREAT  BRITAIN. 

In  Great  Britain  a  different  system  prevails,  resembling  in 
many  respects  that  in  operation  in  America.  The  lines  are 
owned  and  operated  by  private  companies.  The  Electric  and 
International  Telegraph  Company,  incorporated  in  1846,  is  the 
oldest  and  largest  company  in  the  kingdom ;  it  transmits  over 
one-half  of  all  the  messages.*  It  pays  very  large  and  regular 
annual  dividends,  besides  reserving  an  annual  surplus.  The 
stock  in  November,  1867,  sold  at  43-48  per  cent,  premium — in 
June  and  July,  1868,  at  100  per  cent,  premium.  This  great 
rise  was  caused  by  the  proposition  on  the  part  of  the  post-office 
department  to  purchase  their  lines. 

The  British  and  Irish  Magnetic  Company  was  incorporated 
in  1851 ;  it  transmits  about  one-quarter  part  of  the  messages. 
Its  lines  have  more  stations  throughout  Ireland  and  in  certain 
portions  of  England  than  the  Electric  and  International.  It 
also  pays  regular  dividends,  and  its  stock  is  above  par. 

The  rates  for  the  transmission  of  messages  have  always 
varied  with  the  distance  of  transmission.  Reductions  in  the 
rates  have  been  repeatedly  made,  and  the  business  and  profits 
have  increased  with  each  reduction.  There  are  now  four  rates ; 
the  lowest  for  distances  one  hundred  miles  or  under  is  one 
shilling  [thirty-five  cents  currency,]  and  over  one-half  of  all  the 

*  The  message  was  originally  of  twenty  words,  exclusive  of  date,  address  and  signa- 
ture, but  in  1854  ten  words  were  allowed  for  date,  &c.  The  message  is  therefore  of  thirty 
words,  including  date,  address  and  signature. 


11 

messages  pay  the  lowest  rate, — the  average  rate  is  one  shilling 
fourpence. 

In  proportion  to  population,  the  correspondence  by  mail  in 
Great  Britain  exceeds  that  in  Belgium,  but  the  proportion  by 
telegraph  is  in  favor  of  Belgium,  it  being  used  in  Great  Britain 
principally  by  brokers   and    parties    engaged  in  speculative^ 
branches  of  commerce. 

The  Act  passed  on  the  31st  day  of  July,  1868,  enables  the 
postmaster-general  to  acquire,  work  and  maintain  electric 
telegraphs.  It  commences  by  reciting  that  the  means  of 
communication  by  telegraph  are  insufficient,  and  that  many 
important  districts  are  without  any  such  means  of  communi- 
cation ;  that  it  would  be  attended  with  great  advantage  to 
the  state,  as  well  as  to  merchants  and  traders,  and  to  the 
public  generally,  if  a  cheaper,  more  widely  extended  and 
more  expeditious  system  of  telegraphy  were  established ;  and 
that  to  this  end  it  is  expedient  that  the  postmaster-general  be 
empowered  to  work  telegraphs  in  connection  with  the  adminis- 
tration of  the  post-office.  It  authorizes  the  postmaster-general 
to  buy,  and  the  companies  to  sell,  "  their  undertaking,"  on 
such  terms  as  they  may  mutually  agree  upon ;  the  price  to  be 
paid  to  each  company  is  twenty  years'  purchase  of  the  net 
profits  during  the  year  ending  June  30, 1868,  and  if  any  dif- 
ference arises  as  to  the  net  profits,  it  is  to  be  settled  by  arbitra- 
tion. The  postmaster-general,  with  the  consent  of  the  com- 
missioners of  the  treasury,  may  from  time  to  time  make 
regulations  with  reference  to  office  hours  and  rates  of  messages, 
and  the  general  conduct  of  the  telegraph  business.  Provided — 

1.  That  the  rates  shall  be  uniform,  not  exceeding  one  shilling 
for  the  first  twenty  words  of  each  message,  and  not  exceeding 
threepence  for  each  additional  five  words. 

2.  That  the  address  and  signature  shall  not  be  counted  as 
part  of  the  words  for  which  payment  shall  be  required. 

3.  That  there  shall  be  no  extra  charge  for  delivery  by  special 
foot  messenger  within  one  mile  of  the  terminal  office,  or  within 
the  limit  of  the  town  postal  delivery. 

4.  That  beyond  that  distance  the  delivery  shall  be  made  by 
special  foot  messenger,  when  desired,  and  the  charge  for  delivery 
shall  not  exceed  sixpence  per  double  mile  beyond  such  limits. 


12 

5.  That  when  such  special  delivery  is  not  desired,  the  mes- 
sage shall  be  delivered  free  of  extra  charge  by  the  ordinary 
postal  delivery. 

The  postmaster-general  is  further  authorized,  with  the  con- 
sent of  the  commissioners  of  the  treasury,  to  make  contracts 
with  proprietors  of  newspapers  or  news-rooms,  clubs  or 
exchange-rooms,  for  the  transmission  of  messages,  at  rates  not 
exceeding  one  shilling  for  every  hundred  words  transmitted 
between  6  p.  m.  and  9  a.  m.,  and  one  shilling  for  every 
seventy-five  words  transmitted  between  9  a.  m.  and  6  p.  m.,  to 
a  single  address,  with  twopence  extra  to  every  additional 
address.  The  postmaster-general  may  also  let  to  such  party 
the  special  use  of  a  wire  during  such  period  of  twelve  hours  a 
day  as  may  be  agreed  on,  at  a  rate  not  exceeding  £500  a  year. 
He  may  also  permit  messages  to  be  deposited  in  all  post-offices 
or  pillar  letter-boxes,  and  such  messages  shall  be  transmitted 
without  extra  charge.  All  messages  to  be  prepaid  by  stamps, 
or  written  on  stamped  paper. 

Any  person  connected  with  the  post-office  who  shall,  contrary 
to  his  duty,  disclose  the  contents  of  any  message,  shall  be  guilty 
of  a  misdemeanor,  and  be  subject  to  imprisonment  not  exceed- 
ing one  year. 

By  the  reduction  of  rates  and  increase  of  facilities  it  is 
expected  that  the  number  of  messages  will  be  immediately 
increased  from  7,500,000  to  11,650,000,  and  that  the  income 
will  be  sufficient  to  defray  all  expenses  of  operating  and  main- 
taining the  lines,  including  interest  on  the  cost,  and  to  authorize 
an  early  reduction  of  the  rates  to  sixpence,  and  that  the  growth 
of  telegraphy  will  stimulate  the  correspondence  by  mail.* 

THE  TELEGRAPH  IN  AMERICA. 

Reference  has  been  made  to  the  unrivalled  advantages  which 
America  possesses  for  the  general  use  of  the  telegraph.  How 
have  these  advantages  been  improved,  and  what  are  the  pecu- 
liar features  of  the  existing  system  ? 

One  corporation,  the  Western  Union  Telegraph  Company, 
transmits  over  nine-tenths  of  all  the  messages.  As  they  pub- 
lish no  accounts  of  the  number  of  messages  transmitted,  or  of 

*  Table  D  gives  further  statistics  in  relation  to  the  telegraph  in  England. 


13 

the  length  of  their  lines  or  wires,  no  accurate  statistics  of  their 
business  can  be  given  ;  but  it  is  believed  that  the  estimates 
which  have  been  made  are  sufficiently  correct  for  the  use  to 
which  they  are  put. 

RATES.  . 

There  is  no  uniformity  in  the  rates.  They  are  often  less  to 
a  distant  station  than  to  an  intermediate  one  on  the  same  line. 

An  estimate  of  the  average  rates  and  of  the  annual  number  of 
messages  transmitted  has  been  made  by  ascertaining  the  rates  to 
seventy-one  stations  at  different  distances  from  Boston,  and 
arranging  them  in  four  different  classes.  Class  A  includes 
stations  within  500  miles  of  Boston ;  Class  B  those  between 
500  and  1,000  miles ;  Class  C  those  between  1,000  and  1,500 
miles  ;  Class  D  those  between  1,500  and  2,000  miles.  The 
population  of  each  station,  with  the  aggregate  population  of  all, 
and  the  per  cent,  of  population  of  each  station  was  then 
obtained,  and  the  average  rates  of  each  class  ascertained  by 
apportioning  1,000  messages  among  all  the  stations,  in  pro- 
portion to  the  population  of  each,  and  dividing  the  entire 
receipts  of  each  class  by  the  aggregate  per  cent,  of  population 
of  its  stations.* 

By  this  calculation  the  estimated  average  rates  to — 

Miles.  Rates.  Limits. 

Stations  within  .        .        .  500  are  $0.41  $0.20  @  $0.90 

"       between  .        .        .  500  and  1,000      "  1.43  0.75  @    2.25 

"            "  ...  1,000  and  1,500      "  2.46  1.30  @    3.40 

"            "  ...  1,500  and  2,000  "  3.36  3.25  @  $5.50 

Lowest  rate  in  the  table,  20  cents  ;  highest,  $5.50. 
In  order  to  obtain  the  average  rate  of  all  the  messages  trans- 
mitted, it  is  assumed  that 

57  per  cent,  of  all  messages  are  sent  to  stations  in  Class  A. 
30        a  a  «  u  a  «      jj 

10        u  "  "  "  u  "       C. 

g          a  a  a  u  a  a        j) 

100 
In  England  messages  are  transmitted  as  follows : — 

*  Table  E  gives  this  estimate. 


14 

55  per  cent,  to  stations  in  Class  A.* 
30      "  "  "         B. 

10      "  "  "         C. 

5      "  "  "         D. 

100 

As  rates  are  higher  in  America,  a  greater  proportion  of  mes- 
sages are  sent  to  stations  in  class  A  than  in  England,  and  a 
smaller  proportion  to  class  D.  The  average  receipt  per  message, 
at  these  rates,  is  $1.00.  The  gross  receipts  of  the  Western 
Union  Company,  for  the  year  ending  the  80th  of  June,  1868, 
were  16,952,273.  This  sum,  divided  by  the  average  receipts, 
gives  the  whole  number  of  messages  transmitted,  viz.,  6,952,000. f 

The  lowest  rates  between  any  large  cities  are  twenty-five 
cents  between  New  York  and  Philadelphia,  and  thirty  cents 
between  New  York  and  Boston,  for  a  message  of  twenty-five 
words.  J  At  these  rates,  under  the  present  system,  commercial 
messages  are  probably  transmitted  at  a  loss. 

VARIATION  IN  RATES. 

By  comparing  the  rates  from  New  York  in  1852,  and  the 
rates  from  Boston  to  the  same  stations  in  1868,  it  will  be  per- 
ceived that  sixty-one  out  of  seventy-one  stations  in  Table  E  had 
telegraph  stations  in  1852,  and  to  fifty-one  of  these  stations, 
the  rates  were  lower  in  1852  than  in  1868. 

The  rates  between  New  York  and  Boston — 

In  1850  were $0  50 

1852,  20 

*  In  England,  the  rates  are  as  follows:  Class  A,  under  one  hundred  miles,  one  shil- 
ling; class  B,  between  one  hundred  and  two  hundred  miles,  one  shilling  and  sixpence; 
class  C,  over  two  hundred  miles,  two  shillings;  class  D,  to  Ireland,  from  three  to  four 
shillings. 

f  It  may  be  objected  that  those  estimates  are  incorrect,  and  therefore  the  deductions  are 
unreliable.  If  the  Western  Union  Telegraph  Company  furnish  a  statement  of  messages 
annually  transmitted,  the  required  corrections  will  be  made.  If  it  is  not  given,  it  will  be 
because  the  estimates  of  the  average  rates  are  too  low,  and  the  deductions  too  favorable 
to  that  company. 

t  Ten  words  are  allowed  for  every  message ;  date,  address  and  signature  unlimited. 
The  average  length  of  messages  is  twenty-five  words — ten  pay  words,  and  fifteen  for 
date,  address,  signature,  and  memoranda  of  the  company  of  the  amount  paid,  or  to  be 
paid,  the  number  of  the  message,  and  the  number  of  words  in  the  message. 


15 

Later, $0  15 

Then  raised  to 40 

Subsequently  raised  to  ....  65 

In  1866  reduced  to       ....  30 

The  history  of  the  telegraph  will  explain  the  causes  of  these 
different  rates.  Great  competition,  in  1852,  caused  a  large~ 
reduction  in  the  rates.  Soon  after,  the  validity  of  Mr.  Morse's 
patent  was  confirmed  by  the  courts,  many  of  the  competing 
companies  were  enjoined,  and  compelled  to  wind  up  or  sell  out, 
and  some  failed.  In  the  Eastern  and  Southern  States,  the 
American  Telegraph  Company,  in  which  Mr.  Morse  and  his 
friends  were  largely  interested,  bought  out  most  of  the  old 
companies,  and  continued  to  occupy  their  territory  for  many 
years  without  serious  opposition. 

The  various  companies  .in  the  West,  South,  and  North- 
West,  forming  groups  of  feeble  organization,  were  gradually 
merged  into  one  corporation,  under  the  name  of  the  Western 
Union  Telegraph  Company.  In  1864,  the  United  States  Tel- 
egraph Company,  formed  by  a  consolidation  of  three  companies, 
was  organized  to  oppose  this  monopoly,  and  entered  into  a  vig- 
orous competition  with  the  Western  Union,  prices  were  reduced 
in  consequence,  and  the  business  increased  with  great  rapidity. 
In  1866,  the  American  Telegraph  Company,  the  United  States 
Telegraph  Company,  and  the  Western  Union  were  united  under 
the  corporate  name  of  the  last  corporation,  prices  were  again 
raised,  and  this  first  caused  a  less  ratio  of  increase,  and 
finally,  if  the  returns  are  correct,  an  actual  decrease  in  the 
telegraphic  business  of  the  country. 

According  to  the  returns  made  to  the  commissioner  of  the 
internal  revenue,  the  receipts  from  all  the  companies  were, 
for  the— 

Year  ending  June  30th,  1865,  $4,300,000. 

"        "          "         1866,   6,168,700;  increase,  43  per  cent. 

"         1867,  7,986,400;        "       30   "     « 
"          "         1868,   7,156,639;  decrease,  10   "     "* 


a  a 

a 


*  The  receipts  of  the  Western  Union  Telegraph  Company  for  the  year  ending  the  30th 
of  June,  1867,  were  $6,568,925;  for  the  year  ending  30th  of  June,  1868,  $6,952,273,— an 
increase  of  about  six  per  cent. 


16 

Within  the  last  year  or  two,  competition  has  again  arisen  on 
certain  lines,  and  an  examination  of  the  rates  shows  the  places 
at  which  rival  lines  have  stations. 

In  other  countries,  the  rates  are  reduced  with  the  growth  of 
business,  and  are  never  raised.  In  this  country,  they  are 
reduced  by  competition,  followed  by  consolidation  of  the  com- 
peting companies,  and  subsequent  increase  of  rates,  without 
regard  to  the  growth  of  the  business.  The  rates  are  never 
published,  and  are  without  uniformity  or  system.  The  conse- 
quence is  that  the  public  are  universally  ignorant  of  the 
rates,  and  many  do  not,  for  that  reason,  make  use  of  the 
telegraph. 

In  Europe,  the  rates  for  added  words  are  less  than  the  rate 
per  word  for  the  first  twenty  words.  In  Switzerland,  the 
charge  for  the  first  twenty  words  was  one  franc;  for  ten 
added  words,  one-quarter  of  a  franc.  Parliamentary  rates  in 
England  are,  one  shilling  for  the  first  twenty  words ;  three- 
pence for  every  additional  five  words  or  part  of  five  words.  In 
this  country,  they  are  much  higher.  From  New  York  to  Phil- 
adelphia and  Boston,  the  rates  for  the  first  twenty-five  words 
are  one  cent  for  each  word.  The  rates  for  added  words  are 
two  and  three  cents — four  and  six  times  more  than  would  be 
charged  if  the  Swiss  rule  was  adopted. 

Prepayment  is  at  the  option  of  the  sender.  This  increases 
the  length  of  the  message  and  the  cost  to  the  company,  as  it 
transmits  with  the  message  the  amount  paid  or  to  be  paid, 
which  adds  from  two  to  six  words  to  every  message. 

CONNECTION  WITH  RAILROADS. 

The  telegraph  in  this  country  is  very  generally  connected 
with  the  railroad  system,  and  a  large  proportion  of  the  offices 
are  at  railroad  stations.  These  are  seldom  in  the  centre  of  the 
towns,  and  are  not  resorted  to  as  generally  as  the  post-office. 
In  the  large  cities,  the  principal  offices  are  near  the  business 
centres,  with  a  number  of  secondary  offices,  generally  at  hotels 
and  railroad  stations.  The  rent  of  the  main  offices  is  very 
large,  and  the  expenses  for  operators,  clerks  and  managers 
are  also  necessarily  much  more  than  when  the  telegraph  is 
connected  with  the  post. 


17 

CAUSE  OF  TIIE  HIGH  RATES. 

The  lowest  American  rates  are  higher  than  the  average 
foreign  rates,  and  the  average  rates  several  times  higher  than 
the  foreign.  These  high  rates  retard  the  development  of  the 
system,  which  was  more  rapid  in  its  early  growth  in  this  than 
in  any  other  country.  What  are  the  reasons  assigned  for  these 
high  rates  ?  Are  they  well  founded,  and  if  not,  how  can  they 
be  obviated  ?  They  are — . 

1.  That   the  great  length   of  the   lines,  and   multitude  of 
wires  require  a  large  capital  and   heavy  operating  expenses, 
and  that  the  present  rates  yield  only  a  small *het  income. 

2.  That   a   reduction   of    rates   would   be   followed   by   an 
increase  of  business,  and  a  reduction  of  receipts  without  any 
reduction  of  expenses,  and  would  quickly  "  lead  to  ruin." 

3.  That  the  great  number  of  local  stations  necessarily  main- 
tained for   the   public   convenience,  requires   higher  through 
rates  than  would  be  otherwise  necessary. 

4.  That  the  messages  are  sent  great  distances ;  the  cost,  it  is 
assumed,  increasing  with  the  distance. 

5.  The  short  time  each  day  during  which  the  larger  pro- 
portion of  messages  are  transmitted — from  ten  until  two  o'clock, 
P.M. 

1.  That  the  great  length  of  the  lines  and  multitude  of  the 
wires*  require  a  large  capital,  and  heavy  operating  expenses, 
and  that  the  present  rates  yield  only  a  small  net  income. 

According  to  the  annual  report  of  the  Western  Union  Tele- 
graph Company  for  the  year  ending  30th  June,  1868, — 

The  entire  investment  of  the  company  was,        $47,877,350  00 

This  consisted — 

Of  capital,  ....  $41,022,700  00 
bonded  debt,  .         .         .       4,890,500  00 
profits  used  for  purchase 
of  stock,  property  and 
redemption  of  bonds,  .       1,964,150  00 

$47,877,350  00 

*  The  length  of  a  line  is  equal  to  the  distance  between  the  terminal  stations.  A  line 
has  one  or  more  wires.  In  England,  there  are  on  an  average  five  miles  of  wire  to  every 
mile  of  line.  In  this  country,  the  proportion  is  probably  less. 


18 


Tho  gross  income  from  the  date  of  the  present  organization 


in  1866,  to  30th  June,  1868,  was 

This  income  was  expended  — 
For  operating  expenses, 
dividends  and 

interest,       12,220,578  82 
For  construction, .      902,808  31 
sinking     fund 

and  bonds, .      876,355  00 
Balance,         .  1,217,142  87 


813,521,199  00 


*,304,314  00 


5,216,885  00 


413,521,199  00 


Annual  profit  on  investment,  5|-  per  cent. 

Is  this  large  investment  required  ? 

The  average  cost  of  foreign  lines  is  about  $80  per  mile. 
Lines  constructed  in  the  most  approved  manner  can  be  built 
and  equipped  ready  for  working,  at  less  than  $150  for  each  mile 
of  wire,  with  an  average  of  four  wires  to  each  mile  of  line. 

The  largest  part  of  the  lines  of  the  Western  Union  Company 
were  constructed  before  the  rise  in  prices,  and  on  a  gold  basis. 

The  lines  of  the  American  Telegraph  Company,  comprising 
one-third  of  the  lines  of  the  Western  Union  Company,  at  its 
reorganization  in  1866,  cost  $133  per  mile.*  This  amount 
included  the  sums  paid  Mr.  Morse  and  his  associates  for  their 
patents,  which  have  expired. 

The  stock  of  the  Western  Union  Telegraph  Company  sold 
in  August  and  September,  1868,  at  one-third  of  its  par  value. 


Its  market  value  at  this  rate  is 
Capital,  141 ,000,000-^3=     . 
Plus  the  bonded  debt,  . 


$13,666,666  00 
4,890,500  00 


100,000  miles  of  wire,  market  value,  .     $18,557,166  00 

In  1866  it  had  90,000  miles  of  wire.  Since  that  time, 
$900,000  have  been  invested  in  the  construction  of  new  lines;  at 
$150  per  mile,  equal  to  6,000  miles. 

These  estimates  give  the  following  results  of  the  probable 
cost  and  value  of  the  property  of  the  Western  Union  Telegraph 
Company : — 


Senate  Document  No.  49, 1st  session  39th  Congress,  1866. 


19 

100,000  miles  of  wire,  at  $150.00  per  mile,   .  $15,000,000  00 

«          "        "          "  133.33  "  .  13,333,000  00 

«          "        "         "  180.00  "  .  18,000,000  00 

Average  of  these  sums  is  154.00  "  .  15,444,000  00 
Cost  based  on  investment, 
100,000  miles  of  wire 

at       ....  479.00  «  .  47,900,000  00 

The  profits  of  the  Western  Union  Telegraph  Company  for 
the  two  years  ending  30th  June,  1868,  were  .  $5,216,886  00 
Ten  per  cent,  a  year  on  $15,444,000  for  two 

years,  is 3,088,800  00 

Balance, $2,128,086  00 

The  same  business  could  be  carried  on  with  a  smaller  capital, 
and  pay  larger  dividends  at  reduced  rates,  with  the  present 
expenses. 

It  does  not  appear  what  occasioned  this  large  investment. 
The  presidents  of  the  American,  and  Western  Union,  and 
United  States  Telegraph  Companies,  in  their  joint  letter  before 
referred  to,  say :  "  That  the  length  of  wire  owned  by  the 
Western  Union  and  United  States  Companies  is  60,000  miles ; 
average  cost  based  on  the  united  capital  is  $450  per  mile,"* 
and  that  "  the  lines  of  the  American  Company  embrace 
30,000  miles  of  wire,  the  average  cost  per  mile  based  on  the 
capital,  is  $133.33."  No  mention  is  made  of  any  debt. 

These  figures  give  the  following  results  : — 

Western  Union,  60,000  miles,  based  on  a  capital  of  $150  per  mile,  $27,000,000 
American  Co.,    30,000     "         "        «  "        133        "          4,000,000 


Combined,          90,000     "         "        "  "       344       "       $31,000,000 

1868,  100,000,     "     based  on  investment,  479        «       $47,877,350 

Increase  in  cost,        .  "      «  "  135       "         16,877,350f 

2.  A  reduction  of  rates  would  be  followed  by  a  correspond- 
ing reduction  of  receipts,  without  any  relative  reduction  of 
expenses,  and  would  "  lead  to  ruin." 

*  Senate  Document  No,  49, 1st  session  39th  Congress,  1866. 

f  This  sum  was  probably  paid  for  the  purpose  of  effecting  the  consolidation. 


20 


The  presidents,  in  their  joint  letter,  say :  "  That  in  order  to 
map  out  the  effect  of  a  reduction  of  25  and  50  per  cent,  from 
the  present  tariff,  after  what  has  been  said,  can  only  show  how 
quickly  such  a  process  would  lead  to  ruin."*  Here  is  one  of 
their  exhibits : — 

"  American  Telegraph  Company  under  existing  tariffs  : 

"  Receipts,  1865, 11,437,627  21 

"  Expenses  averaged, 1,186,664  08 


"Profit,      . 
"  Tariff  reduced  25  per  cent. : 

"  Receipts,    .... 
"  Increase  25  per  cent., . 

"  Expenses  not  increased, 
"Profit,      . 


$250,973  13 


$1,053,220  41 
263,305  10 

$1,316,525  51 
1,186,654  08 

$129,871  43  " 


The  gentlemen  who  made  this  statement  are  at  the  head  of 
the  telegraph  business  in  this  country,  and  are  directors  in  the 
Western  Union  Telegraph  Company.  They  believed  a  reduc- 
tion would  produce  this  result,  and  have  acted  on  this  belief, 
steadfastly  refusing  to  reduce  rates  until  forced  by  competition  ; 
then  consolidating  with  the  competing  company  and  again 
raising  the  rates. 

We  can  give  the  actual  results  of  such  a  reduction  for  com- 
parison with  this  theoretical  exhibit.  The  rates  in  Great 
Britain  were  reduced  26  per  cent. — from  2s.  10 \d,  in  1862,  to 
2s.  Id.  in  1866.  The  messages  transmitted  by  the  Electric 
and  International  Telegraph  Company  during  that  period 
increased  from  1,534,590  to  3,150,149,  or  105  per  cent. 

The  revenue  increased  from  £219,441  to  £336,458,  or  53 
per  cent. 

The  expenses  increased  from  £148,609  to  £208,739,  or  40 
per  cent. 

*  Senate  Document  No.  49, 1st  session  39th  Congress,  1866. 


21 

The  net  income  increased  from  £70,832  to  £127,719,  or  80 
per  cent. 

Proportion  of  working  expenses  to  gross  revenue  was 
reduced  from  67  per  cent,  to  62  per  cent. 

Proportion  of  net  revenue  to  capital  increased  from  7^  per 
cent,  to  12  per  cent. 

Number  of  messages  per  mile  of  wire  from  44  per  cent,  to 
66  per  cent. 

Gross  receipts  per  mile  of  wire  from  £6  5s.  Id.  to  £7  Is.  5d. 
Working  cost       "       "  «  4  4    9     to     4  7     9 


Net  receipts,     "       "                      £2  0*.  4d.  to  £2  13*.  Sd* 
Applying  these  results  to  the  theoretical  exhibit : 
Revenue  as  before, $1,437,627  00 

Increased  53  per  cent,  by  reduction,  to  .        .      $2,199,500  00 
Expenses  increased  40  per  cent.,  to        .         .        1,661,310  00 

Profits, $538,190  00 

Estimated  profits  by  the  exhibit,  .         .  129,871  00 


Difference  between  actual  and  estimated  profits,        $408,319  00 

Profits  after  reduction, $538,190  00 

Profits  without  reduction,      ....  250,973  00 


Actual  gain  by  reduction,    .         .         .         $287,217  00 

The  European  statistics  prove  that,  with  lines  built  for  cash, 
reasonable  reduction  in  rates,  not  forced  by  competition,  but 
based  on  the  increase  of  business,  will  greatly  increase  the 
number  of  messages  and  the  net  profit. 

3.  The  great  number  of  local  stations  necessarily  maintained 
for  the  public  convenience,  require  higher  through  rates  than 
would  otherwise  be  necessary. 

When  the  rates  to  local  stations  are  uniform  with  rates  to 
main  stations  at  a  greater  distance,  and  the  line  is  filled  with 

*  Electric  Telegraphs,  No.  80,  1868,  page  140. 


22 

through  business,  the  business  to  the  local  stations  is  compara- 
tively unprofitable,  and  a  through  line  can  transmit  messages 
at  a  lower  rate  than  a  through  and  local  line.  For  this  reason 
some  of  the  new  companies  do  not  establish  local  stations. 
Allowance  must  therefore  be  made  for  these  increased  expenses 
in  fixing  the  through  rates. 

4.  That  the  messages  are  transmitted   great  distances,  the 
cost,  it  is  assumed,  increasing  with  the  distance. 

An  examination  shows  that  the  rates  do  not  increase  with  the 
distance,  but  in  a  much  more  rapid  ratio. 

Distance  500  miles;  500  to  1,000;  1,000  to  1,500;  1,500  to  2,000  miles. 

Present  rates,  .        .        .        $0.41        $1.43        $2.41          $3.41 

Rates  increased  with  distance,          0.41          0.82          1.41  1.64 

The  European  statistics  are  of  no  service  on  this  point,  since 
their  longest  distances  are  hardly  as  long  as  our  shortest  lines. 

It  is  estimated  that  on  a  through  line,  without  local  business, 
less  than  25  per  cent,  of  the  operating  expenses  depend  on 
distance.  The  instruments,  operators,  clerks,  managers,  rent, 
office  expenses,  salaries,  messengers  and  stationery  are  inde- 
pendent of  distance.  Depreciation,  repairs,  and  a  few  minor 
items  of  expense  are  increased  by  distance. 

Where  a  message  is  repeated,  the  expense  is  increased  about 
seventy-five  per  cent. ;  but  on  well  constructed  lines,  in  ordinary 
weather,  messages  between  any  two  stations  east  of  a  line  from 
St.  Paul  to  New  Orleans  require  but  one  repetition. 

5.  The  short  time  each  day  during  which  the  larger  propor- 
tion of  messages  are  transmitted,  from  ten  until  two  o'clock,  p.  m. 

Is  this  necessary,  or  is  it  occasioned  by  the  high  rates  ?  The 
capacities  of  the  line  of  telegraph  are  very  great.  2,000  words 
an  hour  are  easily  transmitted  by  a  good  operator,  over  a  single 
wire.  At  this  rate  there  could  be  sent  over  fifty-one  of  the 
eighty  or  ninety  wires  leading  from  the  New  York  office  of  the 
Western  Union  Telegraph  Company,  2,448,000  words,  or  97,- 
920  messages,  of  twenty-five  words  each,  a  day.  This  amount 
cannot  bo  obtained.  Forty  messages  an  hour  are  easily  trans- 
mitted by  a  good  operator  over  a  through  line,  and  this  number 
could  be  sent  every  hour  by  relays  of  operators.  This  estimate 
gives  1,224,000  words,  or  48,960  messages.  On  through  and 
local  lines,  a  deduction  of  one-half  for  twelve  hours  of  the  day 


23 

during  -which  the  local  lines  are  open,  must  be  made — which 
leaves  918,000  words,  or  36,720  messages,  as  the  number 
which  can  be  transmitted  every  day  on  these  fifty-one  wires. 
The  average  number  actually  transmitted  is  184,378  words, 
or  7,375  messages.*  733,622  more  words,  or  29,340  more 
messages  might  daily  be  transmitted  over  these  lines.  If  the 
present  business  could  be  distributed  over  all  the  hours  of  the 
day,  or  if  there  were  sufficient  business  for  all  the  wires  the 
whole  day,  the  rates  could  be  largely  reduced. 

On  an  average  nearly  eighteen  hours  a  day  the  wires  are  idle, 
yet  a  considerable  portion  of  the  expenses  of  the  line  are  no  greater 
than  they  would  be  if  messages  were  transmitted  the  whole  time.f 
Interest,  depreciation  and  repairs,  office  rent,  salaries  and  gen- 
eral management  are  the  same,  whether  much  or  little  business 
is  transacted.  These  items  constitute  about  one-third  of  all 
the  expenses  on  the  Western  Union  line.  The  other  expenses 
will  not  be  increased  in  proportion  to  the  increase  of  the  time, 
as,  under  the  present  system,  a  portion  of  each  day  for  which 
the  employees  are  paid,  they  are  without  steady  occupation. 

A  reduction  of  rates  will  induce  parties  who  now  send  but 
few  messages  daily,  to  greatly  increase  the  number,  and  others, 
who  make  no  use  of  the  telegraph,  to  become  its  regular 
patrons. 

In  England,  and  to  a  great  extent  in  this  country,  the  use 
of  the  telegraph  is  limited  to  a  few  individuals,  engaged  in 
extra  hazardous  or  speculative  business,  where  large  possible 
gains  warrant  great  expenses.  The  high  rates  prevent  its 
use  by  general  merchants  or  for  social  purposes.  According  to 
the  statements  of  the  manager  of  the  Electric  and  International 
Telegraph  Company,  the  use  of  the  telegraph  in  England  "  is 
confined  to  stock  brokers,  mining  agents,  ship  brokers,  racing 
and  betting  men,  fruit  merchants  and  others  engaged  in  busi- 
ness of  a  speculative  character,  or  who  deal  in  articles  of  a 
perishable  nature.  Merchants  hse  it  little  compared  with  those 
engaged  in  the  more  speculative  branches  of  commerce."  In 
other  countries  it  is  more  generally  used. 

*  Journal  of  the  Telegraph,  Oct.  1, 1868,— the  official  publication  of  the  Western  Union 
Telegraph  Company. 

t  The  W.  U.  T.  Co.  recently  reduced  the  rates  on  night  messages,  with  the  expectation 
of  working  their  long  lines  a  larger  part  of  each  day. 


24 

In  Denmark,  "  the  telegraph  is  used  by  mercantile  people  in 
general,  and  for  social  and  domestic  purposes." 

In  Switzerland,  "  the  telegraph  is  far  from  being  confined  to 
certain  classes,  and  the  messages  which  relate  to  private  busi- 
ness and  to  family  affairs  form  as  important  a  part  of  the  whole 
number  as  the  messages  of  the  banking  and  other  trading 
interests." 

In  Belgium,  "  nearly  fifty-nine  per  cent,  of  messages  are  on 
private  business  and  family  affairs." 

In  France,  "  the  telegraph  is  not  confined  to  the  demands  of 
the  speculators,  who  are  found  only  in  the  great  centres,  but  is 
used  by  all  branches  of  commerce,  and  for  all  the  family  wants, 
and  as  well  in  the  small  towns  as  in  the  larger  cities.  Forty- 
one  per  cent,  are  on  family  affairs." 

In  Prussia,  "  when  rates  were  high,  and  the  facilities  few,  its 
use  was  almost  exclusively  confined  to  bankers,  stock  brokers, 
large  commercial  houses,  and  newspaper  correspondents.  Each 
reduction  of  rates,  or  extension  of  the  system  to  small  towns, 
considerably  increased  the  number  of  those  who  regularly  send 
and  receive  messages."11 

A  reduction  of  rates  here  will  produce  a  like  result.  A 
more  general  and  extended  use  of  the  telegraph  will  immedi- 
ately follow.  It  will  be  employed  throughout  the  whole  day, 
and  messages  to  distant  stations  will  be  transmitted  at  night, 
and  outstrip  the  mail  by  many  hours. 

Social  messages  are  generally  transmitted  without  reference 
to  the  time  of  the  day,  but  in  this  country  the  number  is  small, 
as  few  can  afford  the  luxury.  Reduce  the  rates,  and  increase 
the  facilities,  and  the  number  will  increase  greatly,  and  be  dis- 
tributed through  the  hours  of  the  day. 

Brokers,  social  and  other  local  messages,  will  occupy  the 
wires  by  day,  the  through  messages  by  night.  Abroad,  the 
business  being  over  short  distances,  is  confined  to  the  daytime, 
and  pays,  with  low  rates :  here,  with  the  wires  crowded  by 
night  as  well  as  by  day,  the  profits,  at  low  rates,  would  be 
much  greater. 

The  business  will  be  greatly  increased  by  furnishing  addi- 
tional facilities  for  the  reception  and  delivery  of  messages. 
The  statistics  of  the  British  post-office  show  that  the  increase 

*  From  exhibits  annexed  to  the  Special  Report  of  the  Committee  on  the  "  Electric 
Telegraph  Bill." 


25 


of  facilities  for  the  reception  and  delivery  of  letters,  caused 
a  greater  increase  in  their  number  than  the  reduction  of 
postage. 

PROPOSED  REMEDY. 

It  is  not  considered  expedient  either  for  the  government  to 
purchase  the  existing  lines,  or  to  construct  and  operate  lines. 
How  then  can  the  desired  results  be  best  attained  ?  The  post- 
office  department  has  no  facilities  of  its  own  for  the  transmis- 
sion of  correspondence,  either  by  rail  or  telegraph.  It  contracts 
with  the  railroad  companies  for  carrying  the  mail,  and  it  is  pro- 
posed that  it  shall  contract  with  a  telegraph  company  for 
transmitting  messages. 

A  bill  was  introduced  at  the  last  session  of  congress,  and 
referred  to  the  committee  on  Post  Roads  and  Routes,  to  incor- 
porate the  "  United  States  Postal  Telegraph  Company,  and  to 
establish  a  postal  system." 

The  first,  second,  third,  fourth  and  fifth  sections  of  the  bill 
incorporate  the  company,  with  power  to  construct  lines  on  all 
the  post  roads  and  routes  of  the  country. 

The  sixth  section  authorizes  the  Postmaster-General  to 
receive  bids  from  any  telegraph  company  for  the  transmission 
by  telegraph  of  messages  received  and  delivered  through  the 
post-office,  to  all  cities  and  villages  of  5,000  inhabitants  and 
over,  and  to  towns  on  the  line  of  the  telegraph,  where  stations 
may  be  established  by  order  of  the  Postmaster-General. 

The  seventh  section  authorizes  the  Postmaster-General  to 
contract  for  the  transmission  of  messages  by  telegraph,  with 
the  company  that  will  engage  to  transmit  them  for  the  least  sum, 
provided  such  sum  does  not  exceed  twenty-five  cents,  includ- 
in  five  cents  postage  for  each  message  of  twenty  words,  includ- 
ing date,  address  and  signature,  for  each  and  every  500  miles  or 
fractional  part  thereof  the  message  may  be  transmitted,  with 
five  cents  for  each  added  five  words.  All  messages  to  be  pre- 
paid by  stamps,  or  written  on  stamped  paper. 

Messages  to  be  received  at  any  and  all  post-offices,  street 
boxes  or  other  receptacles  for  letters,  and  to  be  delivered  by 
special  carrier  without  extra  expense. 

Messages  requiring  immediate  dispatch  to  have  priority  of 
transmission  on  payment  of  extra  rates. 


26 


Money  orders  to  be  transmitted  by  telegraph  under  such 
regulations  as  the  Postmaster-General  may  prescribe. 

The  eighth  section  provides  that  if  the  United  States  Postal 
Telegraph  Company  shall  refuse  to  make  a  contract  with  the 
Postmaster-General  on  the  rates  specified  in  the  bill,  the  act,  so 
far  as  it  relates  to  the  incorporation  of  the  company,  shall  be 
null  and  void. 

The  effect  of  the  proposed  reduction  will  be  better  apprecia- 
ted by  comparing  the  present  and  proposed  rates. 


* 

Tregent. 
rates. 

Proposed 
rates. 

Reduction. 

Pro  rata 
reduction. 

To  stations  within  500  miles, 
«*        "       between    500   and 

*1,006 

$0  41 
1  43 

$0  30 
55 

$0  11 

88 

26  per  ct. 
62      " 

To  stations  between  1,000  and 
miles,      .... 
To  stations  between  1,500  and 

1,500 
2,000 

2  41 
3  41 

81 
1  47 

1  60 
1  94 

67      " 
56      " 

Averages, 


00 ;     |0  47  ; 


53    53 


The  post-office  department  will  furnish  stamps  and  stamped 
paper  for  messages,  and  envelopes  ;  it  will  envelope,  direct  and 
deliver  the  messages,  in  addition  to  the  expenses  common  to 
letters  and  messages.  For  these  extra  expenses  it  will  receive  an 
advance  of  sixty-six  per  cent,  over  the  present  postage,  and  will 
be  saved  the  expense  of  transmission,  which  is  fifty-six  per 
cent,  of  the  cost  of  each  mailed  letter.  The  cost  for  each 
letter  delivered  by  carriers  is  one  cent ;  for  special  delivery  of 
messages  by  telegraph  companies,  two  cents.  This  expense  will 
be  reduced  by  combining  the  two  systems,  and  making  the 
special  deliveries  regular  during  the  whole  day. 

Over  thirty  per  cent,  of  the  expense  of  telegraphing  will 
be  saved  to  the  country,  if  the  business  is  transacted  in  con- 
nection with  the  post-office  department. 

It  is  not  claimed  that  either  the  Western  Union  Telegraph 
Company,  or  any  other  company,  or  even  the  government  itself, 
could  transmit  messages  throughout  the  country  at  the  rates 
proposed  in  the  bill,  without  loss. 


27 

But  it  is  claimed  that  a  company  with  well-constructed  lines, 
built  for  cash,  can  transmit  messages  at  these  rates,  in  con- 
nection with  the  post-office,  and  realize  a  large  profit  on  the 
investment,  with  a  small  net  revenue  to  the  department. 

1.  The  expense  of  transmission  is  reduced  as  the  number 
of  messages  transmitted  is  increased. 

2.  The  cost  of  rent,  general  management  and  office  expenses 
will  be  very  greatly  reduced  and  shared  with  the  department. 

3.  Fewer  clerks  and  managers,  and  less  stationery  and  print- 
ing will  be  necessary,  and  the  reduced  expense  will  be  divided 
with  the  department. 

4.  The  number  of  words  in  each  message  will  be  reduced  by 
the  prepayment  of  the  messages,  and  the  expenses  will  also  be 
reduced  by  giving  the  operators  constant  employment. 

5.  The  facilities   at  local  offices   will    be  increased,  with 
reduced  expenditures. 

6.  The  facilities  in  the  large  cities  for  the  reception  and 
delivery  of  messages  through  the  sub-offices,  street  boxes,  and 
letter    carriers,  will    be    greatly    increased,    with    decreased 
expenses. 

Instruments  have  been  recently  invented,  and  are  in  opera- 
tion, either  in  England  or  in  this  country,  by  which  two  great 
hindrances  to  the  efficiency  of  the  telegraph  are  remedied. 
Mr.  Stearns,  president  of  the  Franklin  Telegraph  Company, 
has  invented  an  instrument  by  which  messages  are  transmitted 
both  ways  at  the  same  time,  on  the  same  wire,  thus  doubling 
its  capacity,  without  any  increase  of  expense.  Sir  Charles 
Wheatstone,  in  England,  has  invented  an  instrument  by  which 
double  the  number  of  words  can  be  transmitted  and  received 
on  the  same  wire,  at  an  increased  expense  in  the  preparation  of 
the  message  for  transmission.  Instruments  are  also  in  opera- 
tion in  Great  Britain,  worked  by  boys,  after  instruction  of  one 
or  two  days.  These  different  inventions  provide,  one  for 
through  and  the  other  for  local  business,  while  the  new  steel 
and  copper  wire,  with  its  greater  strength  and  less  size  and 
weight  in  proportion  to  its  conductivity,  requires  a  less  number 
of  insulators,  affords  fewer  points  of  contact  with  conducting 
surfaces,  and  transmits  messages  greater  distances,  in  all 
weathers,  without  repetition. 


28 

With  reduced  rates,  improved  instruments  and  wires,  and 
increased  facilities,  the  future  of  the  telegraph  in  America  will 
fulfil  the  prophecy  of  its  youth,  and  the  correspondence  of 
the  East  with  the  "West,  and  of  the  North  with  the  South, 
will  be  transmitted  by  the  electric  telegraph,  and  time  and 
distance  be  annihilated. 

I  am,  yours  respectfully, 

GARDINER  G.  HUBBARD. 


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